By Bob Egelko

Advocates of low-cost housing scored a legal victory Monday when the U.S. Supreme Court left intact a ruling by California's highest court allowing cities and counties to require builders to include a percentage of affordable units in each new development.

The building industry had argued that those requirements amount to a government confiscation of property and should be allowed only if a particular development would cause a shortage of affordable housing. The state Supreme Court rejected those arguments unanimously in June, and the nation's high court denied review Monday.

The case involved a San Jose ordinance, passed in 2010 but not yet in effect, that requires developers of 20 or more units to make at least 15 percent of those units affordable to low- or moderate-income buyers and renters. Similar laws are in effect in more than 170 California communities, including San Francisco, Berkeley, Richmond and unincorporated areas of Contra Costa, Marin and San Mateo counties.

San Francisco requires builders of 10 or more housing units to include at least 12 percent affordable housing or pay a fee. The Board of Supervisors is scheduled to vote Tuesday on whether to ask voters in June to increase that allotment to 25 percent.

The court action "strengthens us both legally and politically," said Supervisor Aaron Peskin, who supports a 25 percent requirement. He said the decision should also allow San Francisco to bolster affordable housing by eliminating the fee option, although no such proposal is on the table.

Supervisor Scott Wiener, who opposes increasing the housing quota to 25 percent, said nonetheless that affordable-housing laws are needed to make sure that "low-income and middle-income people can stay in our cities," and that Monday's court action properly allows elected officials and the voters, not the courts, to determine city policy.

A lawyer for the California Building Industry Association, which challenged the San Jose ordinance, said the Supreme Court's rebuff would mean that "fewer homes get built, and the price of market-rate housing goes up, squeezing more and more buyers out of the market."

"There is no excuse for forcing property owners -- in this case, the builders of new homes -- to foot the bill for problems they didn't cause, such as the affordable-housing shortage," said the attorney, Brian Hodges of the Pacific Legal Foundation.

In its 7-0 ruling in June, the state Supreme Court said cities can legally regulate land use to protect the public welfare, even if the rules reduce builders' profits. Laws like the San Jose ordinance are a valid response to the "scarcity of affordable housing," said Chief Justice Tani Cantil-Sakauye.

No U.S. Supreme Court justices dissented publicly from the decision to leave the California ruling intact. One justice, Clarence Thomas, said the Constitution would not allow a government agency to impose such a requirement on its own, and he expressed "doubt" that a city council or other legislative body has any more authority. But that issue may not have been raised adequately in this case, Thomas said.

The case is California Building Industry Association vs. San Jose, 15-330.

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